With overall apparel shipment reducing in Bangladesh denim apparel import by the US continued to fall consistently in November 2020. US imported $264 million worth denim apparels in November, declining 10.90 per cent on year-on-year and 19.53 per cent on month-on-month basis.

After witnessing a yearly growth for three consecutive months in denim apparel shipment to US, Bangladesh plunged by 2.66 per cent in November clocking $54.80 million revenues.

The bigger concern for Bangladesh is monthly decline of 24 per cent in November 2020 as compared to October 2020 at a time when Mexico – which stands at the second spot – just dropped by 2.35 per cent monthly. Nevertheless, Bangladesh is still the top denim shipper to US as, cumulatively, it hit $522.77 million in January-November 2020 period and the value is around $100 million more than Mexico. Mexico’s denim shipment decreased 10.46 per cent in November 2020 over November 2019 and was worth $50.77 million.

Vietnam, the third top denim apparel shipper to the US was also down 2.97 per cent on year-on-year basis and denim apparel shipment totalled $33 million in November 2020, while it saw a plunge of 20.78 per cent on month-on-month basis. Meanwhile, China experienced a steep drop both year-on-year 36.46 per cent and month-on-month it was down 25.75 per cent to clock $28.15 million in November 2020.

Rising price of cotton in the international markets has caused a ripple effect on Bangladesh local yarn, affecting garment shipments, especially of knitwear, during the on-going coronavirus pandemic. The widely consumed 30-carded yarn is now selling for $3.60 to $3.75 per kg whereas it was $2.60 to $2.80 two months ago, according to knitwear manufacturers and suppliers.

Local spinners, traders, millers and consumers import cotton from the futures markets placing booking in advance as local growers can merely supply 2.50 per cent of the annual requirement of 75 lakh bales. Charges for transport add to the local importers' costs, which also has an impact on yarn prices. One main reason rise in cotton prices is increased imports by China, the largest consumer worldwide. Moreover, China and Pakistan, despite themselves being major producers, have increased their import targets because of high prices prevailing in China and lower production in Pakistan.

A United States Department of Agriculture (USDA) report notes Bangladesh too may reduce import by 5 lakh bales in the cotton marketing year (August–July) of 2020-21. Mainly due to apparel businesses not recovering fully yet. Covid-19 had a dramatic impact on nearly every sector of the global economy and cotton was no exception. As the extent of Covid-19 impact became clearer, the 2020-21 world use forecast was slashed. However, as components of the world economy have recovered, use has edged up in recent months and is now only 3 per cent below that of February.

With global use forecast down and production largely unaffected, 2020-21 ending stocks are forecast higher at 97.5 million bales, 19 per cent (15.4 million bales) above the February Outlook.

The Clothing Manufacturers Association of India, (CMAI) has written an open letter to Nirmala Sitharaman, Minister of Finance outlining pre-Budget recommendations. The association has urged the government to consider key financial aid that can help the industry recover from the aftermath of the Covid-19 pandemic.

Government support for MSME sector

The letter states how the Indian garment industry, whose manufacturing is solely dependent on retail, is the worst affected, in view of the stringent lockdowns, partial lockdowns, and an on off approach to markets being allowed to operate. What compounds the problem is the fact that more than 80 per cent of the garment industry is within the MSME sector, with its own constraints of finance and sustaining power.

Rajesh Masand, President, CMAI, explains it is therefore, essential that the garment manufacturing sector, which is the highest employer in the country after agriculture, gets strong support from the government if it has to survive and recover in coming years. The upcoming Budget for 2021-22 is an ideal opportunity for the government to extend this support to the MSME sector in this crucial industry. Support to this industry will also add tremendous fillip to the ‘Atmanirbhar Bharat’ philosophy of the government.

CMAI, also states how in the financial year 20-21, many companies will face a drastic drop in revenue and profits and it would impact them financially. This would create a situation where banks might drastically curtail or withdraw credit facilities. Hence, CMAI recommends banks should continue giving Drawing Power (DP) based on 2019-20 performance, and not give weightage to the 2020-21 numbers. Furthermore, companies showing any ‘Loss’ return in Income Tax should be not an automatic candidate for scrutiny, as this year it is possible that many companies might incur heavy losses .

GST at 5%, better interest rates

Although retail sales have shown some signs of pick up, it is still struggling at around 60 to 65 per cent of last years’ sales. Consumers are yet to build sufficient confidence to resume normal shopping – especially when it comes to discretionary spending. Hence, the association has strongly recommended the current distinction in GST rates below and above Rs 1,000 is removed, and a uniform rate of 5 per cent GST is applied.

The association also recommended at least for a period of one year, domestic manufacturers are offered working capital interest rates at the same rate as exporters to provide a huge relief to the manufacturers.

The government is contemplating an outstanding PLI Scheme, which for the textile sector been converted to a FPLI Scheme. One of the qualifying criteria for this scheme is a current base turnover of Rs 100 crores. For the garment sector, and especially the domestic sector, there are only a miniscule number of manufacturers who would qualify for this criterion. To really give a massive push to the avowed objective of pushing MMF sector, the association strongly believes the minimum turnover criterion be reduced to Rs 50 crores, for this scheme to be effective.

With a focus on evolving the region’s organisational design, footprint, and building new capabilities to accelerate growth, VF Corp, one of the largest apparel retailers has come up with a transformation plan for its Asia Pacific operations. Now VF Corp will move the centre of its brand operations from Hong Kong to Shanghai as it aims to forge stronger and more relevant relationships with Chinese consumers.

VF’s Asia Product Supply Hub, which serves as the base of operations for its global supply chain in the region, will also move from Hong Kong and relocate to Singapore.

This will enable greater integration across VF’s global supply chain network, which also includes key hubs in Europe and America. Additionally, VF will redeploy some of its product supply talent and resources throughout its primary sourcing countries in the region to work more closely with key suppliers and drive greater efficiency.

An additional shared services centre for the region will be established in Kuala Lumpur (Malaysia). This centre will help the company further expand the footprint of the back-end business functions that support its brands and supply chain operations across the Asia Pacific region.

The new centre will house various functions including digital technology, finance, human resources and logistics. Hong Kong will remain a key retail market for VF and its brands. The company will activate a phased transition plan to guide these relocations over the next 12 to 18 months with the first moves expected in April 2021.

This announcement reinforces the company’s commitment to invest in their business across the Asia Pacific region, while also supporting VF’s overall transformation plan to become a more consumer-minded, retail-centric and hyper-digital enterprise.

PDS Multinational Fashions has appointed Sanjay Jain as CEO. Jain previously served as CEO of Future Retail and Group CFO of Future Group. Jain has over 26 years experience in leading transformation across various companies and helping them unlock their intrinsic value. He has raised over $4 billion from some of the world’s marquee strategic, private equity and financial investors.

Created an asset-light company that has achieved double-digit growth year-on-year over the past decade, PDS is a true Indian multinational company. Through its global footprint, it has been successful in building strong relationships with some of the world’s leading retailers serving them across both physical and digital distribution channels. Rather than acquiring companies, PDS has been built through joining hands with entrepreneurs across the globe and supporting them through the PDS platform. Now the company is expanding the business in new territories, new product segments, and new customers. With the appointment of Sanjay Jain, a seasoned senior professional, with global experience, who led various transformation, growth, and value creation initiatives, join they plan to drive initiatives for building financial strength, operational excellence, and shareholder value creation.

Marks & Spencer has bought fashion brand Jaeger, which had been part of the Edinburgh Woollen Mill group of retailers now in administration. The fashion retailer M&S has set out plans to sell complementary third-party brands as part of its Never The Same Again programme to accelerate its transformation and turbocharge online growth.

In line with this, M&S has bought the Jaeger brand and are in the final stages of agreeing the purchase of product and supporting marketing assets from the administrators of Jaeger Retail Limited.

According to some reports the deal would mean no store staff from Jaeger will keep their jobs, and physical sites - currently closed due to lockdown restrictions - would be expected to close permanently.

New York-based company G-III Apparel, has entered the race to buy Arcadia and is among four top contenders that also include Next, Boohoo, and US-based Authentic Brands. The company owns the DKNY brand and also holds licences for big-name labels Calvin Klein, Tommy Hilfiger, Karl Lagerfeld and Levi’s.

As per Telegraph reports, G-III has around $800 million to help fund any buy. The group itself had pre-pandemic sales of $3.1 billion and a stock market value of $1.3 billion. But the company closed over 200 US stores last summer and said its wholesale business, anchored by our five global power brands: DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld, will continue to be the primary growth and profit engine.

There are justifiable fears in British retail that some of the main contenders for Arcadia have little or no interest in running physical shops. Regardless of who wins the Arcadia race, it’s expected to be finalised by the end of next month with administrator Deloitte selecting the parties to go forward to the next bidding round at some point in January.

Despite positive news of retail chain Edinburgh Woollen Mill being sold, the company continues to shutdown more stores, although the potential buyer hasn’t been named. News reports suggest, hundreds of jobs could be rescued with administrator FRP Advisory having issued sale contracts to the potential buyer.

But despite this, it still seems only a small number of shops in the 400-store chain will continue. The company has already made around a third of the more-than-2,500 employees redundant since the EWM chain collapsed last November. The chain was the foundation of the larger EWM group built up by Philip Day. He also owned Peacocks, Bonmarché, Jaeger and Austin Reed and had a total empire of 1,100 stores.

The chain is now being picked apart with Jaeger reportedly set to be bought by M&S, although there is also little news that the Peacocks buyout plan led by its e-commerce chief has stalled. Day still has a big say in what happens to the various businesses having taken £140 million of security at group level that was previously held by Barclays Bank and cross-guaranteed by various group companies.

Xinjiang’s total cotton output, unit yield, planting area, and commodity allocations rank first in China for 26 consecutive years. Data from the National Bureau of Statistics shows, Xinjiang’s cotton output was 5.161 million tons in 2020, an increase of 3 per cent over last year accounting for 87 per cent of China’s total cotton output.

The Announcement of the National Bureau of Statistics on Cotton Production in 2020 issued by the National Bureau of Statistics shows cotton sown area in Xinjiang will reach 37.5285 million mu in 2020, accounting for 78.92 per cent of the national planting area. According to a sample survey by the National Bureau of Statistics, Xinjiang cotton (lint) yield is 137.5 kg/mu, which is higher than the national average yield of 13.2 kg/mu.

Thanks to the unique natural conditions, Xinjiang cotton has high quality. Since the 1990s, China’s cotton production area has gradually shifted from the Yellow River Basin to Xinjiang. At present, Xinjiang is the largest cotton producing area in China and an important cotton producing area in the world.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has published its first sustainability report under the theme ‘Go Human Go Green’, where it outlines the country’s readymade garment (RMG) sector’s commitment to becoming more ecologically aware and socially responsible.

The sustainability report has been developed with assistance from German government via the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, as part of the Promotion of Social and Environmental Standards in the Industry (PSES) program. Rubana Huq, President, BGMEA declared seven pledges to contribute more towards improving worker’s education, early childhood learning of workers’ children, mental health, sustainability, culture export of Bangladesh, workers health, industry innovation and efficiency for the RMG sector.

Bangladesh is the world’s second-biggest garment manufacturer, after China, and employs about 4.1 million workers and is responsible for more than 80 per cent of the country’s export earnings. The report will help measure and manage the impacts of a business or industry on people and planet and accordingly set goals to perform better. The actions are aligned with the aspiration of building the ready-made garment (RMG) industry of Bangladesh so that it becomes economically, socially and environmentally sustainable.